Pet Insurer Trupanion’s Business Facing Numerous Challenges; Short Interest at 35%+
July 12, 2023
Image: Trupanion may be growing its top line like a weed, but its operating losses have been growing, too. Image Source: Trupanion 10-K. By Brian Nelson, CFA Trupanion, Inc. (TRUP) offers medical insurance for cats and dogs across the U.S, Canada, Europe, Puerto Rico, and Australia. The company generates revenue primarily from subscription-based insurance fees, and the firm prices its offerings to achieve a target margin that seeks to balance the costs of pets with less-expensive veterinary expenses with the costs of pets that have more-expensive veterinary expenses. As with any insurer, Trupanion’s actuarial team is a big value driver to its operations, and the firm has been collecting pet health data for over 20 years to finetune its pricing
Domino’s Pizza Breaks Through Downtrend on Uber Eats and Postmates Deal
July 12, 2023
Image Source: Domino’s Pizza is up nearly 14% on a year-to-date basis during 2023, but the company’s shares haven’t done much over the past 52 weeks. By Brian Nelson, CFA On July 12, Domino’s Pizza (DPZ) announced that it had inked a new deal with Uber (UBER) that would allow customers in the U.S. to order Domino’s food through the Uber Eats and Postmates apps with delivery provided by drivers of Domino’s and its franchisees. Domino’s Pizza continues to be a standout leader in digital initiatives across the restaurant arena, and the firm noted that the new agreement will open up Domino’s and its franchisees “to a new segment of customers and what (it) believes will be a meaningful amount of
NextEra Energy Expects 10% Annual Dividend Growth
July 11, 2023
Image: FPL accounts for a large portion of Nextera Energy’s earnings. Image Source: Form 10-K By Brian Nelson, CFA NextEra Energy (NEE) is one of our favorite utility ideas. The company operates two principal businesses, FPL, which is the biggest electric utility in Florida, and NEER, which is the world’s largest generator of wind and solar power and a global player in battery storage. FPL has approximately 32,100 MW of net generating capacity and is state regulated, serving more than 12 million people, with residential accounting for a little more than half of operating revenue. FPL operates four nuclear power plants. NEER has 27,400 MW of total net generating capacity and represents one of the largest wholesale generators of electric
Apple: $200 Per Share at the High End of the Fair Value Estimate Range
July 10, 2023
—– NOW READ — ALERT: Big Yield Additions to Dividend Growth Newsletter Portfolio and High Yield Dividend Newsletter Portfolio NOW READ — ALERT: Going to “Fully Invested” in the Best Ideas Newsletter Portfolio NOW READ — Expect Huge Equity Returns This Decade, Much More Volatility However NOW READ — There Are No Free ‘Income’ Lunches ———- It’s Here! The Second Edition of Value Trap! Order today! —– Brian Nelson owns shares in SPY, SCHG, QQQ, DIA, VOT, BITO, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, and RSP. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies. Valuentum members
Dividend Increases/Decreases for the Week of July 7
July 7, 2023
Below we provide a list of firms that raised their dividends during the week ending July 7. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Agricultural Bank of China (ACGBY): now $0.6772 per share dividend. Bank OZK (OZK): now $0.36 per share quarterly dividend, was $0.35. Catskill Hudson Bancorp (CSKL): now $0.12 per share quarterly dividend. China Taping Insurance Holdings Company Limited (CTIHY): now $0.83 per share annual dividend. The Connecticut Light and Power Company 1.90 CUM PFD (CNLTL): now $0.475 per share quarterly dividend. The Connecticut Light and
How Much More Will Consumers Pay for McCormick Spices?
July 4, 2023
Image: Pricing growth remains the story at McCormick, but for how long? Image Source: McCormick By Brian Nelson, CFA Those that know McCormick & Company (MKC) are aware of its dominance in spices and seasonings, but just how much more can the consumer pay for its products? So far so good it seems, but we have doubts consumers are going to keep paying up and up ad infinitum for its flavors. Something’s got to give eventually, and that could result in a big quarterly miss, in our view. When McCormick reported second-quarter fiscal 2023 results on June 29 for the period ending May 31, 2023, all its sales growth came from pricing actions, with McCormick experiencing a 0.9% decline in
Nike’s Fourth-Quarter Fiscal 2023 Earnings Miss Not Tragic But Better Opportunities Elsewhere
July 4, 2023
Image: Valuentum By Brian Nelson, CFA On June 29, Nike (NKE) reported fourth-quarter fiscal 2023 results for the period ending May 31, 2023. During the quarter, revenue advanced 5% and 8% on a currency-neutral basis, but investors mostly focused on Nike’s bottom line, where diluted earnings per share fell 27%, to $0.66, missing the consensus estimate by a couple pennies. The firm expects material improvement in fiscal 2024, but we’re skeptical of just how much. Nike continues to face increased product input costs as well as elevated freight and logistics expenses while consumers continue to take advantage of marked-down merchandise, pressuring margins. Though higher prices in some categories have helped mitigate Nike’s weak overall earnings performance, the firm’s gross margin
Tesla Registers Record Total Deliveries in Second Quarter 2023
July 4, 2023
Source: Tesla By Brian Nelson, CFA At the start of 2023, Tesla’s (TSLA) price-to-fair value ratio stood at just 0.39, revealing a stock that was severely undervalued and one of the most undervalued stocks in our coverage universe. Shares of Tesla have rocketed higher more than 150% so far in 2023, and while we highlighted it as one of our favorite stocks to start this year, it never made it into the newsletter portfolios. We’re not too worried about that though given how well the newsletter portfolios were positioned with respect to exposure to large cap growth, which, itself, is up more than 35% so far in 2023. On July 2, Tesla noted that it delivered a total of 466,140
Walmart’s ‘Great Value’ Brand and Position Across Retail Never Stronger
July 4, 2023
Image: Walmart’s shares have gotten back on track. By Brian Nelson, CFA Grocer Aldi may have been the greatest beneficiary of the past 12-18 months due to consumers trading down from lofty grocery prices, but Walmart (WMT) has kept pace, in our view, as Target (TGT) struggles from a public relations nightmare and membership warehouses like Costco (COST) feel the need to cut down on membership card sharing as comparable store sales weaken. We think Walmart’s ‘Great Value’ brand and position across bargain retail has never been stronger, and its share price reflects a company that is at a sweet spot of consumer demand as rivals continue to struggle. The high end of our fair value estimate range of
